Enterprises often engage in business planning activities. Examples of enterprise planning activities for which accuracy is critical include budget planning, revenue forecasting, inventory management, resource planning, and the like. Enterprise business planning, however, is a difficult and expensive task that often produces inaccurate results.
Conventionally, enterprises have taken either a “top-down” or a “bottom-up” approach to enterprise planning. Bottom-up planning involves the aggregation of low-level forecasts from the lowest cost centers of an organization. For budget planning, for example, management personnel may be required to periodically forecast expenses, and allocate the expenses to a number of categories, such as advertisement, travel, and salaries. However, the bottom-up forecasts rarely, if ever, reconcile with top-down business targets. In top-down planning, enterprises identify fundamental business targets, such as average product price, cost per employee, and the like, and push the targets down through the hierarchical structure of the enterprise. However, in performing top-down planning, large, diverse enterprises may develop planning models that do not fit the needs of all the business units of the enterprise.